Allegations of widespread wrong-doings have plagued Australia’s finance sector since many years, adding pressure on the industry to undergo a thorough root-and branch reform.
On Monday, the head of the government-backed inquiry which is delving into Australia’s finance sector to see whether there has been any wrong-doings, stated confidential documents brokered by banks, insurance companies and pension funds, will have to be provided to it for scrutiny.
In his opening remarks, Commissioner Kenneth Hayne stated any attempt by an institution to prevent information from being made public, including dispute settlements with customers, would “incite the closest attention”.
Australia’s most powerful government inquiry body is the Royal Commission. It has the power to compel witnesses and recommend criminal charges. It is scheduled to run for 12 months and was ordered in response to allegations of poor practices targeting customers.
Following years of scandals at Australia’s major banks, the Australian government relented to public pressure and allowed an inquiry into its financial sector, including the rigging of interest rates, alleged money laundering for drug syndicates and terrorists and insurance fraud.
Although the banking sector has rejected suggestions that it need root-and branch reform, it has vowed to respond to public concerns and co-operate with the commission.
Hayne stated, it would not be possible for the inquiry to publicly examine every case of alleged misconduct, instead it would focus on identifying why problems arose and examine how institutions responded.
At the opening day of the inquiry, Rowena Orr, a barrister who is assisting the commissioner, said lending practices in the country will be scrutinized first.
“The commission will hear evidence of events involving certain financial services entities in the context of home lending that suggest that consumers have not always enjoyed the right to be treated honestly and fairly when it comes to home loans,” said Orr. “Some of these events may have involved breaches of the law while others may have involved departures from community standards and expectations.”